A product is a (tangible item) or (Intangible item) used to satisfy a want or a need.
A product must fulfill its function. By this we mean:
- : meet expectations eg a television must deliver a clear sharp picture
- last the expected life span eg a television must still work after 5 years
- not fail eg a television must not break down during a key programme
- Be aesthetically pleasing ie the look of the product and its packaging is stylish and appealing
- Capable of economic production - i.e. can the business research, design, manufacture and market a reliable good to the specification required by consumers and still make a profit?
Ideally a business should make its products different from those of competitors. This is achieved through product .
Few businesses just have one product – most market a number of goods. Businesses therefore need to manage their product .
Product portfolio analysis helps a business establish its current position and decide
- Which products should receive more or less
- If it needs to adjust current products, add new products to, or drop current products from the portfolio
The Boston is one model for product portfolio analysis. Products are classified as either:
- : high growth and market share
- Cash Cows: high market share and low growth
- Question marks: or problem children - low market share in high growth markets
- - low market share and low growth
Products, like people, have life cycles:
The product life cycle describes the way in which sales and profits generated by a product change over time. The main stages in the product life cycle model are:
or introduction stage: a new product takes time to get established because relatively few customers are aware of the product. Market size and growth is slow. Promotional spending is high
stage where the product is bought by early adopters. Sales growth accelerates and profits reach their peak.
stage with static sales as most consumers accept the product limiting the potential for new sales and causing profits to begin declining.
stage Only laggards and repeat purchases are left. Sales and profits decline.